So, yeah. The problem with Republicans answering questions about subsidies from the media, is that the media is getting its information from the White House and isn’t doing any fact checking.

And according to Democrat from Texas Martin Frost, the four billion Obama’s been talking about hasn’t gone to the “big” oil companies since 1975.

I’m a supporter of the president. I’m concerned that he’s going to lose credibility on this oil and gas issue, because he’s not telling the truth, entirely.

What he is saying is that you need to eliminate four billion dollars worth of tax breaks for major oil companies because major oil companies have obscene profits. The problem with this is that one of the big tax breaks that he’s citing, percentage depletion, was repealed by congress in 1975, thirty-six years, as it affects major oil companies.

The only ones that get percentage depletion any more are domestic independents, who drill most of the wells in the United States and employ four million people.

Frost claims to be worried that if people find out “the president is not telling the truth about the depletion allowance, that it doesn’t go to the major oil companies, he’s going to have some additional problems in the polls.”

It may still be a good idea to simplify the tax code so that independents don’t have to hire tax experts to reduce their tax burden, but we do need to understand what the current effects are if we expect to make any positive changes. If we don’t know what we’re changing, we can’t expect good results.

This is part of why it’s important, when we talk about ending subsidies, or ending loopholes, or ending deductions, to reform the entire system. When we focus on one particular subsidy or deduction, we become susceptible to lobbyists, who will lobby to ensure that it’s the other guy’s subsidies and deductions that get cut. This naturally puts the bigger companies in the position of being able to hurt smaller companies who can’t afford as many lobbyists and lawyers. In this case, Obama has been convinced by someone that he needs to hurt “independent oil”, which will naturally benefit “big oil”.